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Financial Services Manual (FIN)

FIN 210: Business Manager
Responsibilities

Purpose

To describe business manager responsibilities for reviewing
financial reports

Source

University policy

Applicability

Business managers and others performing business manager
functions

Policy

Monthly Financial Reports

Business managers must review the monthly financial reports for
their areas, including lower-level operating units. This review may
include a review of monthly rollup reports or other available
monthly reports where rollup reports are not available. The monthly
reviews typically should be done within 30 days of the report
preparation date (in the upper left-hand corner of the report).
Business managers should:

use the procedures provided below in their review of the
monthly financial reports

or

develop their own written procedures for identifying
significant financial variations.

If significant financial variation is apparent, the business
manager must determine the cause for the variation, take corrective
action in a timely manner, and report the variation to higher-level
management (for examples of the types of variations, see
“Significant
Financial Variation” and “Insignificant Financial
Variation” below).

Note:

Financial irregularities may or may not cause any significant
financial variation in the accounting records. Financial Services
will notify university management of any significant financial
variations that come to attention of the office.

Org Manager Responsibilities

In addition to reviewing the monthly reports, business managers
must also fulfill any org manager responsibilities assigned to
them, e.g., reviewing the monthly reports for agency/orgs of their
direct supervisor.

Consulting Assistance

Upon request, Financial Services provides consulting assistance
to business managers on the accounting data reflected in the
monthly reports and on accounting techniques useful to business
managers.

Procedure

Obtain the financial reports each month for the department,
college, or vice presidential area.

Review the reports for any significant financial variations.

Note:

For Local Budgeted Fund Accounts, the reviewer may need to add
back to the current fund balances the outstanding encumbrances.
Personal services are encumbered at the beginning of the fiscal
year for the entire year’s salary and deducted from fund
balances at that time; these encumbrances cause many local
agency/orgs to have deficit fund balances after encumbrances, but
still positive fund balances before encumbrances.

For the business manager, determining what a significant
financial variation is or what is expected of him or her is a
judgment decision. Examples of financial variations are described
below.

The College of Veterinary Medicine Local Budgeted Funds have a
positive year-end budgeted fund balance of $250,000, yet the
monthly report shows a current deficit fund balance, after add back
of outstanding encumbrances, of $150,000.

For this example, the business manager needs to investigate why
the actual financial results are significantly different from the
budget.

The College of Veterinary Medicine has a positive year-end
budgeted fund balance of $250,000 and the monthly report shows a
current positive fund balance, after add back of outstanding
encumbrances, of $175,000.

Under most circumstances, this type of financial variation would
not cause concern. Even though the actual fund balance is less than
budgeted, the actual financial results may not be beyond what can
be expected, and the present shortfall could simply be the result
of timing differences during the year.

Discuss any significant financial variation with the
appropriate org manager or business manager. If the variation is
adequately explained, no further reviews or investigations should
be necessary. The need for any further reviews and/or
investigations will depend upon the answers received and the
likelihood that the answers obtained adequately explain the
variance.

Inform the business manager’s supervisor of any
significant financial variation that cannot be adequately and
appropriately explained and contact Financial Services or the
Office for Research and Sponsored Projects Administration to
discuss further reviews and/or investigations.